Market watch: Upward revision in GDP growth lifts bourse
Bulls returned to the bourse on Friday as the benchmark KSE-100 index posted a rebound of 192 points following upward revision in Pakistan’s economic growth rate for the previous fiscal year due to rebasing.
On Thursday, the government rebased the economy from fiscal year 2005-06 to 2015-16, which expanded the size of the economy, propped up growth rate and reduced the public debt.
However, the decline in tax-to-gross domestic product (GDP) ratio, as a result of the change in methodology, capped gains at the stock market.
Moreover, market interest remained muted as investors awaited the announcement of monetary policy on Monday next week. Although market players expected the central bank to maintain the status quo, they remained cautious and opted to safeguard their positions from a surprise change in the policy rate.
In addition, the rapid increase in Covid-19 cases in Pakistan sparked fears of renewed curbs and kept investors at bay.
The first half of Friday’s trading session kicked off with a jump and the market crossed the 45,000-point barrier. However, pessimism prevailed over the surge in Covid-19 infections, which erase some of the gains.
In the second half, the market remained largely flat as the KSE-100 index rose in the beginning and dived towards the end.
At close, the benchmark KSE-100 index recorded an increase of 192.31 points, or 0.43%, to settle at 45,018.28.
A report of Arif Habib Limited stated that bulls ruled the bourse due to expectation of maintaining the status quo in the upcoming Monetary Policy Committee (MPC) meeting.
“The market opened on a positive note and stayed in the green zone throughout the day,” it said. “Main board activity, however, remained gloomy.”
On the flip side, the market continued to trade sideways as it witnessed hefty volumes in third-tier stocks, the report said.
In the last trading hour, value buying was observed due to corporate result announcements in the upcoming week, it said.
JS Global analyst Neelam Naz said that the market saw positive momentum on the back of upward revision in the GDP growth rate and rebasing measures taken by the Pakistan Bureau of Statistics (PBS).
“The KSE-100 closed the week at 45,018, gaining 192 points day-on-day,” she said. “Among major index movers were TRG Pakistan, Mari Petroleum, Bank AL Habib, UBL and Allied Bank whereas major volume leaders were TRG Pakistan, Jahangir Siddiqui and Company, WorldCall Telecom, Cnergyico Pk and Ghani Global Holdings.
“Going forward, monetary policy announcement and futures rollover next week are key events to look at, therefore, a cautious approach is advised,” the analyst said.
Overall trading volumes dropped to 176.1 million shares compared with Thursday’s tally of 254.2 million. The value of shares traded during the day was Rs7.1 billion.
Shares of 342 companies were traded. At the end of the day, 203 stocks closed higher, 118 declined and 21 remained unchanged.
TRG Pakistan was the volume leader with 19.2 million shares, gaining Rs3.16 to close at Rs84.9. It was followed by Jahangir Siddiqui and Company with 13.8 million shares, losing Rs0.08 to close at Rs14.24 and WorldCall Telecom with 12.6 million shares, losing Rs0.01 to close at Rs2.17.
Foreign institutional investors were net sellers of Rs2.36 million worth of shares during the trading session, according to data compiled by the National Clearing Company of Pakistan.